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American Apparel’s Vertical Expansion

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    American Apparel vertical expansion has been very successful. The company took a completely different direction than most of American companies and has set a different style for making profits. American Apparel targets young adults in a non-traditional way with raw and sexually explicit promotion that most companies wouldn’t ever follow. If anything American Apparel has established a product differentiation. American Apparel clothes are timeless pieces of clothing which doesn’t rely on high fashion against of what the mainstream media would emphasize.

    Intimate clothing made of 100 percent cotton provides comfort and quality to customers and embraces an unconventional management style. In addition to American Apparel’s unconventional product and marketing, management style is also different. A vertically integrated company is uncommon because of low cost labor in other countries and globalization trends that had made the world easier to connect by exporting and importing products efficiently.

    American Apparel concentrates production in America where the company is involved in design, knitting, sewing, dying and wholesale all in one. The ability of the company to develop vertically has strengthened the control and quality of every garment securing the quality the customer expects. Since most of American Apparel success comes from its vertically integrated system, the company should maintain its production style. The gain from the product differentiation which is “made in USA” is what the company is all about.

    A change in production style might harm the customers brand loyalty. The premium American Apparel charges can be affected by a different management style because customers pay the premium for quality and what the company stands for. When expanding internationally, American Apparel should maintain the vertical integration style to make an impact in other countries. Most foreign countries enjoy Americanization and by representing a USA theme made clothing it can set a brand preference among foreigners.

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